Description
compare and contrast agency theory and stewardship theory in corporate governance from chapter 3 of isbn 9780198702757
with no more than 1 to 2 sources

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Running head: AGENCY THEORY AND STEWARDSHIP THEORY
Agency Theory and Stewardship Theory in Corporate Governance
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AGENCY THEORY AND STEWARDSHIP THEORY
Agency Theory and Stewardship Theory in Corporate Governance
Introduction
In today’s business world, analysis of corporate governance is customarily carried out
around major theoretical constitutions. Some of the most typical are stakeholder theories,
stewardship theories, agency theories, and resource-dependence theories. Among these, the
Agency and the Stewardship approaches to modern corporate governance are the most talked
about. Agency theory arises due to the distinction between shareholders (the principal) and
directors (the agents) hired to run the organization. As noted by Jensen and Meckling (1976),
managers will not act to maximize the profits to shareholders except proper governance
mechanisms are set in position to safeguard the shareholders' interests. Contrarily, Stewardship
theory views corporate governance from a different perspective, unlike the agency theory,
reflectin...
